Does Older Housing Become Affordable? Is This ‘Filtering Down’ A Planning Truism Or A Myth?

OLYMPUS DIGITAL CAMERA
Toronto Apartment Building circa 1928 Creaky floors but huge compared to modern apartments. No 'filter down' here!

Can academic planning theory take part of the blame for a growing worldwide affordable housing crisis? It has long been proposed (and seems perfectly reasonable on the surface) that affordable housing stocks will be maintained or grow as more and more expensive new housing is built.  That’s because older housing will become gradually less desirable, losing value, and in turn becoming less expensive to buy or rent. This theory is a good reason for not deliberately building the affordable housing that will always be needed. Simply by waiting, time will create the necessary affordable housing, filtering it down to those in need.

There is, however, not a great deal of evidence that ‘filtering down’ actually produces a steady supply of affordable housing. There are home renters and buyers who believe that older housing is more valuable rather than less valuable. Personal and subjective ideas result in people cherishing ‘more traditional’ housing styles such as ornate gables, higher ceilings and profligate square-footage. Supposedly practical ideas of sturdiness and longevity also influence an attraction towards older buildings—’they don’t build things the way they used to,’ whether in fact or myth.

In Australia, a recent discussion by university academics highlights the peril of leaving the supply of affordable housing to the vagaries of a ‘filter down’ theory. As well, they cite studies that indicate that in Australia at least, the housing market responds poorly, if at all, to classical theories of supply and demand.

Read their analysis and conclusions for the future of affordable housing in The Conversation: Affordable housing policy failure still being fuelled by flawed analysis

The issue of actual versus perceived value of older housing is also important to decisions when planning for housing targeted to serve people with low incomes. Renovate older housing, or build new? This question is tackled in Biznow: Why Building New Affordable Projects Can Be Easier Than Preserving Old Housing